PLDT's P20-B capex for broadband needs

MORE THAN P10B EARMARKED ALSO FOR NGN SERVICES

By Lenie Lectura

Reporter

INVESTMENTS for broadband Internet service will eat up a large portion of Philippine Long Distance Telephone Co.’s (PLDT) P20-billion capital expenditure (capex) this year, president Napoleon Nazareno said Tuesday. From a programmed capex of P18 billion last year, the PLDT group is setting aside about P20 billion this year to finance the upgrade and operation of its wireline and wireless services. “Our capex this year will be higher than last year’s. It’s about P20 billion. A major portion of that will go to our broadband services,” Nazareno told reporters. PLDT is expected to earmark more than P10 billion to finance its broadband and Next Generation Network (NGN) services. “More than half of the capex will go to broadband and NGN. We will be spending more this year for our broadband and NGN,” Nazareno said. Of the P18-billion capex set aside for 2006, P16.9 billion were spent as of end-September for PLDT’s wireless broadband access service, NGN roll out, 3G (third generation) cell sites installation and expansion of its call- center business. Nazareno said that with mobile-phone penetration peaking out in the country, PLDT is focusing on expanding its data processing businesses—mainly the broadband aspect, but also business process outsourcing and its call-center component—to fuel growth. “There is still growth this year in terms of new wireless subscribers. However, it will be a modest growth,” he said, adding that election spending this year will drive growth in cellular subscribers. Subscribers to PLDT’s mobile- phone group last year reached slightly over 24 million.  The PLDT official earlier said that there are still 20 to 25 million potential mobile-phone subscribers to be tapped by the industry. “There are still certain segments of the market that has not been fully penetrated yet. This represents the D and E markets and the lower C part of the market,” Nazareno said. The country’s wireless penetration rate stood at 45 percent as of November last year, with PLDT accounting for about 58 percent of the market. Rival Globe Telecom has an estimated 36-percent market share.  Also, PLDT said in a statement yesterday that SPi, its BPO unit—100-percent owned by ePLDT—has earmarked a capital outlay of P5 billion to pursue its acquisition and expansion plans this year. “Our acquisition and expansion plans are geared towards accelerating growth and strengthening our position as the premier provider of global BPO solutions. The capital outlay will allow us to broaden our capabilities, enter new markets, and further migrate from more commodity based activities to higher value services, said Ernest Cu, SPI president. SPi has a significant share of the legal, publishing and health-care aspects of outsourced business. The company is known as the largest litigation support coding provider in the world, as well as one of the Top 10 electronic discovery firms, the No. 1 vendor in outsourced space for publishing and the third largest medical transcription provider for US firms. This year SPi will seek business line extensions for its publishing and legal groups, as well as a platform acquisition to gain a foothold in the finance and accounting industries. To accommodate its growth, SPi is opening two new facilities that will be operational by mid 2007 and include a 300-seat facility in Chennai, India and a 450-seater in Hanoi, Vietnam. The Chennai center will house health care and publishing operations, with the Hanoi center initially catering to publishing operations. In the US, SPi has investments in systems and infrastructure located in New York, Virginia, Texas and Tennessee.  The Philippines, however, remains a major delivery hub for SPi, which employs 4,600 in different locations in Metro Manila, as well as in the provinces of Laguna just south of the capital, and Cebu and Negros Oriental in central Philippines.

 

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